Southeast Asia’s Infrastructure Deficit

Many of the region’s economies are being held back by lagging infrastructure.

By Steven Keithley for The Diplomat

March 17, 2014

Almost two thousand years ago, the most powerful empire in Western history was in danger. The domain of Emperor Publius Aelius Hadrianus Augustus, more commonly known by the name Hadrian, was falling apart at the fringes. His predecessor, Trajan, had expanded Rome far beyond its “natural limits” along the banks of the Euphrates, and the specter of war loomed both within the Empire and outside its borders. For Hadrian, that dark warning of mortality he had received upon coronation, Memento mori, or “remember that you will die,” seemed to be coming true.

However, as most anyone can tell you, neither Hadrian nor his Empire vanished. Instead, Rome grew stronger, and more stable, a consequence modern historians attribute, at least partially, to Hadrian’s prolific construction of roads. It might seem odd, but in the annals of history, the various battles that consolidated the empire have been forgotten, the names of most of its leaders have drifted out of memory, but the roads are still remembered, forever memorialized by the volumes of men like Dionysius of Halicarnassus, who wrote that “[t]he extraordinary greatness of the Roman Empire manifests itself above all in three things: the aqueducts, the paved roads, and the construction of drains.”

Two millennia later, in our century, the wisdom of Hadrian, and the merits of roads (and other, more modern, forms of infrastructure), still resonate. This can be seen especially in the Asia-Pacific region, the nations of which possess a stark dichotomy of transportation networks, and an even starker dyad of economic success and failure. The correlation of these two variables certainly underscore the positive impact infrastructure can have on national development today.

The nation that has seems to have taken Hadrian’s lessons most to heart is the People’s Republic of China. Since the days of Deng Xiaoping and China’s first five-year plan under the banner of Gaige Kaifang (Reforms and Openness), and even more so in recent years, China has witnessed an immense boom in the construction of highways, railways, ports and mass transit systems. The reason? Just like Hadrian thousands of years ago, Beijing’s leaders realize the importance of such infrastructure to China’s long-term goals. As one National Development and Reform Commission bureaucrat stated in a report before the Communist Party’s Congress, “transport plays an extremely important role in China’s socio-economic development.”

China’s boom has manifested itself in every imaginable transportation sector. In roads, the Middle Kingdom now possesses the world’s largest network, with more than 100,000 km of expressways. In rail, China’s state-run railway corporation (CRC) already operates the world’s largest high-speed rail network and the longest high-speed route. (The CRC is already working to surpass its own record with a new high-speed line to Urumqi.) And in urban transport, dozens of cities across China either have, or are in the process of constructing subway systems. This list could easily go on. In fact, China’s achievements in this field so amazed U.S. President Barack Obama that, before a joint session of Congress in September 2011, he said, with a hint of frustration and exasperation, “Building a world-class transportation system is part of what made us an economic superpower. Now we’re going to have to sit back and watch China build newer airports and faster railroads?”

Some analysts have dismissed China’s transportation infrastructure, claiming that it has to be at that scale to accommodate the world’s most populous nation. However, when factors such as the pace of construction are considered, China’s transportation network does shine, especially for a developing nation. There is no denying that Beijing has clearly recognized and embraced the importance of having strong road, rail and mass transit networks. And, at least as an indirect result of the goods and services that can utilize such networks, the Chinese economy has prospered.

China is not the only developing nation in East Asia with commendable transport infrastructure. For example, Thailand and Laos, two countries whose (largely Chinese-funded, a point that should not be lost to the reader) railway systems for instance received substantial praise from The Economist last year, regularly rank near the People’s Republic in terms of the quality of their infrastructure.

However, these positive cases are vastly outnumbered in Asia. While China, Thailand and Laos may have earned the praise of analysts, many of their neighbors dwell near the bottom of the charts. The truth is, the majority of Asia’s road and rail networks are still incredibly fragile (some still lie in a state of construction, an ongoing effect of the 1997 Asian Financial Crisis) and their mass transit systems are, at best, negligible.

The smallest and arguably weakest nations have transportation systems that are either on par with, or just above the quality expected and seen in Sub-Saharan Africa. It is illustrative of this point that the most remarkable transport-related event to occur in Cambodia recently was the revival of public transportation in Phnom Penh. Since February 2014, residents have, for the first time in more than thirty years, been able to use one of ten buses to get to work. Meanwhile, in Timor-Leste, citizens can barely travel outside of Dili, with more than half of all roads rated as “poor” and almost all of them receiving zero maintenance since the departure of the Indonesian occupation forces. Stories like this abound across Southeast Asia’s smaller nations, and go hand-in-hand with economic woes.

Unfortunately, and somewhat unexpectedly, it is not all that different in the larger and comparatively wealthier nations of Southeast Asia, some of which have recently clashed with China and possibly harbor their own aspirations of regional dominance. Despite its impressive economic growth in recent years, the Philippines has seen very little growth in the total length of paved roads across the archipelago over the past fifteen years, surely not a wise development for a nation with a population growth rate hovering around two percent. Simultaneously, in Indonesia, despite being labeled a “government priority” several years ago, responsibility for the construction and maintenance of transportation infrastructure is so decentralized that the type of large-scale, coordinated projects necessary to keep the world’s 16th largest economy competitive are impossible to undertake. In fact, a recent survey of Japanese businesses ranked poor infrastructure as the primary barrier to the Indonesian market. In Vietnam, meanwhile, rail networks are almost non-existent and the nation, whose entire Eastern border hugs the South China Sea, did not even have a deep-water port until 2009!

For all these countries, poor transportation infrastructure systems have ramifications far beyond the comical traffic jams featured so often on Western social media sites. The most notable effect is that investors, which the primary markets of Southeast Asia depend heavily upon, recognize these pitfalls as too costly and often try avoid them. When road, rail, sea, air and other links are unsatisfactory, so are investors’ profits, and thus, so is local economic growth.

This is one reason why China is comparatively attractive, and partly why it has been growing at such an impressive rate. In the next few years, the Philippines, Indonesia and Vietnam, the leaders of which are so quick to compete with Beijing over issues like the South China Sea, should instead try competing with Beijing in highways, railways or public transportation networks. Instead of chest-beating, they need throw their weight behind projects, building the same foundation that Hadrian did two millennia ago to achieve his goals in the Middle East. China certainly appears to have done so.

Steven Keithley studies international history at Georgetown University.